Recording system Flashcards
(23 cards)
recording system
BFP, forms of notice, recording statutes, discrete chain of title problems
recording system
BFP
A bona fide purchase (BFP) is one who:
- Buys Blackacre for value AND
- w/o notice that someone else got there first
recording system
BFP - 2 bright line rules
In a double-dealer situation,
- If B is a BFP and we are in a NOTICE jdx, B wins regardless of whether or not she records before A does.
- If B is a BFP and we are in a race-notice jdx, B wins IF she records properly before A does.
recording system
BFP - value
If BFP pays below FMV, BFP still takes for value as long is she remits substantial pecuniary consideration for value.
recording system
BFP - doomed donee
If B is O’s heir, devisee, or donee, in a recording statute question, B LOSES unless the shelter rule applies.
recording system
forms of notice
The 3 forms of notice that a buyer may potentially be charged are AIR:
Actual
Inquiry
Record
Inquiry and record notice are both forms of constructive notice and are imputed to B.
recording system
forms of notice
actual
Actual notice: Prior to B’s closing, B learns of A.
recording system
forms of notice
inquiry
inspection
reference to an unrecorded transaction
recording system
forms of notice
inquiry
inspection
Whether he looks or not, B is on inquiry notice of whatever an inspection of Blackacre would show.
Buyer has a duty to inspect before transfer of title to see whether anyone else is in possession.
If another is in possession, B has inquiry notice regardless of whether buyer actually bothered to inspect.
Lack of inspection can defeat BFP status.
recording system
forms of notice
inquiry
reference to an unrecorded transaction
If a recorded instrument makes reference to an unrecorded transaction, grantee is on inquiry notice of whatever a reasonable follow up would show.
recording system
forms of notice
record
B is on record notice of A’s deed if at the time B takes, A’s deed was recorded properly.
recording system
forms of notice
record
win depends on recording statute
If B is a BFP and A has not recorded, win depends on the recording statute.
- If we are in a NOTICE jdx, B wins regardless of whether or not B records before A does.
- If we are in a race-notice jdx, B wins IF B records properly before A does.
recording system
recording statutes
Notice statute, Race-notice statute
recording system
recording statutes
notice statute
“A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, UNLESS THE CONVEYANCE IS RECORDED.”
If, at the time B takes, B is a BFP, B wins.
Last BFP to enter wins.
recording system
recording statutes
Race-notice statute
“A conveyance of an interest in land shall not be valid against any subsequent purchaser for value, without notice thereof, WHOSE CONVEYANCE IS FIRST RECORDED.”
To prevail, B must 1) be a BFP and 2) B must have recorded first (won the race to record).
recording system
recording statutes
A’s proper recordation
If A promptly and properly records before B takes, A puts later buyers on record notice and thereby defeats their status as BFP.
recording system
recording statutes
proper recordation
To give record notice to subsequent takers, the deed must be recorded properly within the chain of title.
Chain of title refers to the sequence of recorded documents capable of giving record notice to later takers.
In most states, the chain of title is established through a title search of grantor/grantee index.
recording system
discrete chain of title problems
shelter rule
wild deed
estoppel by deed
recording system
discrete chain of title problems - shelter rule
One who takes from a BFP will prevail against any entity that the transferor-BFP would have prevailed against.
IOTW, the transferee takes shelter in the status of her transferor, and she steps into the shoes of the BFP even though she otherwise fails to meet the requirements for BFP status.
recording system
discrete chain of title problems
aim of the shelter rule
Shelter rule aims to protect B, a BFP, by making it easier to B to transfer successfully w/o the burdens of O’s double dealers.
recording system
discrete chain of title problems
wild deed
O sells to A, who does not record. Then A sells to B, and B records the A-to-B deed.
The A-to-B deed, although recorded, is not CONNECTED to the chain of title b/c the O-to-A link is missing from the record.
The A-to-B deed is a wild deed
recording system
discrete chain of title problems
rule of the wild deed
If a deed entered on the records has a grantor unconnected to the chain of title, the deed is a wild deed. It is INCAPABLE of giving record notice of its existence.
Recording a wild deed is a nullity, an outlier.
recording system
discrete chain of title problems
estoppel by deed
One who conveys realty in which he has no interest is estopped from denying the validity of that conveyance if the deed purported to convey a particular estate.
